From Briefing.com: The U.S. stock market went into rally mode on Thursday, bolstered by a variety of factors that carried the S&P 500 to the top end of the trading range it has been in since early April, and both the Nasdaq Composite and Russell 2000 to new all-time highs.
The support structures for Thursday's rally included the following:
A dovish interpretation of the FOMC meeting and Fed Chair Yellen's remarks on Wednesday
A rosy combination of economic data today that painted a picture of improved economic activity and low inflation pressure CPI (+0.4%) and core CPI (+0.1%) prints were lower than expected Initial claims, the Philly Fed Index, and Leading Indicators were all better than expected S&P 500 regained a posture above its 50-day simple moving average off the open
With the ongoing saga in Greece, there was a notion that the U.S. is a more secure place to be invested right now
Dollar weakness, which helped lift the stocks of multinational companies
The S&P 500 closed the session with a 1.0% gain. The S&P 500 information technology sector (+0.8%) went along for the ride, but a more modest gain in Apple (AAPL 127.88, +0.58, +0.5%), and an ugly showing from Oracle (ORCL 42.74, -2.17, -4.8%) following its disappointing fiscal fourth quarter report and first quarter outlook left the sector underperforming the market.
Notable news items from sector components included the following:
Fiserv (FISV 82.68, +1.75, +2.2%): Has expanded its card production capabilities to include milling and embedding, enabling the company to complete the entire EMV chip card production process in house
Google (GOOG 536.73, +7.47, +1.4%): Company's Nest business unveiled Nest Cam, which is a home security and monitoring device. Separately, SkyNews reported that Google may partner with PE firm to bid for Tesco's Dunnhumby unit
Yahoo! (YHOO 40.93, -0.03, -0.1%): BrightRoll, a division of Yahoo! Inc., announced the international expansion of its technology infrastructure into Hong Kong with Equinix. With expansion into Equinix's Hong Kong data center facilities, advertisers can access the BrightRoll Marketplace in APAC and connect to publishers in the region, including Yahoo owned and operated inventory. TouchPal announced a strategic partnership with Yahoo! that adds Yahoo's mobile search capabilities to TouchPal's Android user platform.
IDC said the wearables market maintained its upward trajectory in the first quarter of 2015 as new vendors, including Apple (AAPL127.88, +0.58, +0.5%), prepared to enter the market. A new forecast from the International Data Corporation Worldwide Quarterly Wearable Device Tracker estimates that 72.1 mln wearable devices will be shipped in 2015, up a strong 173.3%
from the 26.4 mln units shipped in 2014. Shipment volumes are expected to experience a compound annual growth rate of 42.6% over the five-year forecast period, reaching 155.7 mln units shipped in 2019.
Elsewhere in the technology space:
Alibaba (BABA 86.75, -0.05, -0.1%): Bloomberg reported that Alibaba's finance unit closed a private placement that would value the business at more than $40 billion, according to two people familiar with the matter. Separately, Alibaba and Foxconn announced an agreement under which Alibaba and Foxconn will each invest JPY14.5 bln in SoftBank Robotics Holdings Corp, the SoftBank Group's intermediate holding company responsible for its robotics business. Under the agreement, upon the completion of the investment by Alibaba and Foxconn, SoftBank's SBRH share ownership ratio will become 60%, and Alibaba and Foxconn will each hold ownership stakes of 20%.
Ctrip.com International (CTRP 75.01, -0.40, -0.6%): Announced proposed offering of $1 billion convertible senior notes
Cypress Semiconductor (CY 12.65, +0.11, +0.9%): Sent a letter to the Integrated Silicon Solutions (ISSI 21.46, +0.06, +0.3%) Board, indicating it is raising its offer to acquire ISSI to $21.25/share in cash from $20.25/share versus Uphill Investment's $21 offer (ISSI is holing a special meeting regarding its takeout tomorrow). Cypress also introduced a ticking fee, which will add an incremental $0.10 per share for each additional quarter required to obtain regulatory approval for a transaction with Cypress. This ticking fee will accrue daily starting on October 1, 2015 (the day after ISSI expects the Uphill transaction to close) and will be payable by Cypress to ISSI stockholders at transaction close. The Uphill Agreement provides no such ticking fee. Cypress also included a reverse termination fee even though the company thinks it is entirely unnecessary.
FitBit (FIT 29.68, +9.68): Rallied 48% on its first day as a publicly-traded company
Qihoo 360 Tech (QIHU 71.26, +1.11, +1.6%): Bloomberg real M&A column discusses that Chairman's buyout proposal of $77/share might be the best offer the company will receive
Twitter (TWTR 34.66, -0.03, -0.1%): CNBC reported Twitter is looking to focus on live events, using traditional marketing.
Analyst Action:
Blackhawk Network (HAWK 40.41, +1.40, +3.6%): target raised to $50 from $44 at Deutsche Bank
CA, Inc. (CA 30.49, +0.20, +0.7%): initiated with a Market Perform at JMP Securities
Juniper Networks (JNPR 27.89, +0.47, +1.7%): upgraded to Outperform from Neutral at Wedbush
Marvell Technology (MRVL 14.46, +0.36, +2.6%): upgraded to Neutral from Sell at Goldman -- Removed from Americas Sell List
Micron (MU 24.47, -0.01, -0.1%): target lowered to $41 from $47 at Stifel
Nimble Storage (NMBL 30.34, -1.26, -4.0%): downgraded to Hold from Buy at Wunderlich; target $33
Oracle (ORCL 42.74, -2.17, -4.8%): target lowered to $42 from $44 at MKM Partners... RBC Capital Mkts lowers its target to $48 from $50... FBR Capital raises its target to $48 from $44... Wedbush lowers target to $40 from $42
(Disclosure: Briefing.com has a business relationship with Yahoo)
5:23 pm Novatel Wireless announces it has signed an agreement to acquire 100% of the issued share capital of DigiCore Holdings, a provider of advanced machine-to-machine communication and telematics solutions for ~$87 mln (MIFI) : Co announces it has signed a definitive agreement to acquire 100% of the issued share capital of DigiCore Holdings Limited, a provider of advanced machine-to-machine (M2M) communication and telematics solutions, for 4.40 South African Rand per share, for an aggregate purchase price of approximately USD $87 million based on current exchange rates. Irrevocable undertakings have been signed by holders of 58% of DigiCore's outstanding shares to vote in favor of the transaction.
4:46 pm Rambus and SK Hynix extend license agreement to 2024; SK Hynix will continue making payments to Rambus averaging $12M per quarter for the next 36 quarters (RMBS) : Co and SK Hynix announce they have signed an amendment that extends the current agreement between the two companies through July 1, 2024 for use of Rambus memory-related patented innovations in SK Hynix semiconductor products. SK Hynix and Rambus signed the original agreement for a five-year term in June 2013. With this amendment and extension of the agreement for an additional six years, SK Hynix will continue making payments to Rambus averaging $12M per quarter for the next 36 quarters. In addition, SK Hynix has the option to renew the agreement for an additional three-year extension under the existing rate structure. Other terms and details of the agreement are confidential.
4:15 pm Microchip Technology receives US and German antitrust clearance to acquire Micrel (MCRL) (MCHP) : There is no further antitrust clearance required for closure of the transaction. Co continues to expect that the transaction will close in the third calendar quarter of 2015.
4:10 pm : The major averages ended Thursday on an upbeat note with the Nasdaq Composite (+1.3%) leading the market higher. In addition to pacing today's advance, the Nasdaq set a fresh nominal intraday record high at 5,143.32, overtaking levels last seen in March 2000.
Equity indices rallied throughout the morning after the combination of yesterday's FOMC policy statement and today's economic data set the tone for interest rates to remain at their current levels for longer. To that point, the CPI report for May (+0.4%; Briefing.com consensus 0.5%) was cooler than expected while the remaining data points released today indicated improving economic conditions.
Stocks extended their gains in the early afternoon once Germany's Die Zeit reported that Greece is on track to receive an extension until the end of the year without the involvement of the International Monetary Fund. However, that report was struck down promptly as German Chancellor Angela Merkel said she is only aware of the proposal that was brought forth by the creditors.
Furthermore, Reuters reported European Central Bank member Benoit Coeure was asked if Greek banks will be able to open tomorrow, to which he responded, "Tomorrow, yes. Monday, I don't know." However, the ECB was quick to deny issuing this warning.
Despite the continued uncertainty, all ten sectors posted gains with health care (+1.5%) holding the lead throughout the session. The countercyclical group rallied behind biotechnology as iShares Nasdaq Biotechnology ETF (IBB 377.88, +11.33) spiked 3.1%. In turn, biotechnology helped the Nasdaq Composite spend the day ahead of the Dow and S&P 500.
The tech-heavy Nasdaq enjoyed all-around support as chipmakers displayed relative strength with the PHLX Semiconductor Index climbing 1.5%. Meanwhile, most large cap tech names held their own, but Oracle (ORCL 42.75, -2.16) fell 4.8% after missing earnings/revenue estimates and guiding below consensus expectations. Oracle's underperformance kept the tech sector (+0.8%) behind the broader market throughout the day.
Elsewhere among cyclical sectors, industrials ended in-line with the broader market, but that masked relative strength in transport names. The Dow Jones Transportation Average spiked 1.5% with all 20 members ending in the green. Alaska Air (ALK 63.99, +1.96) climbed 3.2% to pace the rally while five other components gained at least 2.0% apiece.
Also of note, the energy sector (unch) surrendered its gain ahead of the close even though crude oil added 1.1%, settling at $60.42/bbl. In other commodities, gold futures jumped 2.1% to $1202/ozt, contributing to a 1.2% gain in the Market Vectors Gold Miners ETF (GDX 19.09, +0.23).
Treasuries surrendered their overnight gains and continued their retreat into the afternoon, sending the benchmark 10-yr yield higher by three basis points to 2.35%.
Today's trading volume surpassed recent totals as more than 830 million shares changed hands at the NYSE floor.
Economic data included Initial Claims, CPI, Current Account Balance, Leading Indicators, and the Philadelphia Fed Survey:
The initial claims level declined to 267,000 for the week ending June 13 from an unrevised 279,000 while the Briefing.com consensus expected a decline to 276,000
The four-week moving average dipped to 277,000 from 279,000
The Consumer Price Index increased 0.4% in May after increasing 0.1% in April while the Briefing.com consensus expected an increase of 0.5%
That was the largest monthly increase in the headline index since a 0.6% gain in February 2013. Prices were flat on a year-over-year basis
Total energy prices increased 4.3% in May after decreasing 1.3% in April
Gasoline prices rose 10.4% after declining 1.7% in April
Excluding food and energy, core CPI increased 0.1% in May after increasing 0.3% in April while the consensus expected an increase of 0.2%
The current account deficit for the first quarter totaled $113.30 billion while the Briefing.com consensus expected the deficit to hit $116.70 billion
The fourth quarter deficit was revised to $103.10 billion from $113.50 billion
The Leading Indicators report for May was up 0.7% while the Briefing.com consensus expected an increase of 0.4%
The Philadelphia Fed Survey for June rose to 15.2 from 6.7 while economists polled by Briefing.com had expected an improvement to 8.0
There is no economic data on tomorrow's schedule.
Nasdaq Composite +8.4% YTD
Russell 2000 +6.7% YTD
S&P 500 +3.0% YTD
Dow Jones Industrial Average +1.6% YTD
DJ30 +180.10 NASDAQ +68.07 SP500 +20.80 NASDAQ Adv/Vol/Dec 2011/1.73 bln/834 NYSE Adv/Vol/Dec 2080/832.5 mln/1021 3:40 pm :
Weakness in the dollar index today helped provide some strength to select commodities such as precious metals
Aug gold ended the day +2.1% at $1202.00/oz, while July silver gained $0.19 to $16.16/oz
WTI oil futures gained some steam today, rising $0.65 to $60.42/barrel
Gasoline and heating oil futures also posted gains today
Meanwhile, July natural gas lost 2.8% to $2.78/MMBtu
July corn fell $0.02 today to end floor trading at $3.58/bushel
4:07 pm Red Hat beats by $0.03, beats on revs (RHT) : Reports Q1 (May) adj. earnings of $0.44 per share, $0.03 better than the Capital IQ Consensus of $0.41; revenues rose 13.5% year/year to $481 mln vs the $472.57 mln consensus, and 22% measured in constant currency.
Subscription revenue for the quarter was $425 million, up 14% in U.S. dollars year-over-year, or 23% measured in constant currency.
4:03 pm Finisar reports EPS in-line, revs in-line; guides Q1 EPS in-line, revs in-line (FNSR) : Reports Q4 (Apr) earnings of $0.25 per share, in-line with the Capital IQ Consensus Estimate of $0.25; revenues rose 4.5% year/year to $320 mln vs the $320.5 mln consensus. Non-GAAP gross margin improved to 30.3% compared to 30.0% in the preceding quarter, primarily due to the improvement in yields for a new optical engine product for supercomputing applications that we started to ramp in the third quarter of fiscal 2015 that had negatively impacted gross margin during that third quarter, partially offset by the impact of the full three months of the annual telecom price reduction that typically takes effect on January.
Co issues in-line guidance for Q1, sees EPS of $0.23-0.29 vs. $0.27 Capital IQ Consensus Estimate; sees Q1 revs of $308-328 mln vs. $ 317.34 mln Capital IQ Consensus Estimate.
12:23 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (247) outpacing new lows (69) (:SCANX) : Stocks that traded to 52 week highs: ABT, ACET, ACFC, ACGL, ADMS, AEC, AFG, AFSI, AGII, AGO, AHS, ALJ, ALLB, ALN, ALNY, AMBA, AMCX, AMED, AMPH, AMSF, AMSG, ANAC, ANN, ANTH, AOS, APLE, ASGN, ATAI, ATRC, ATRI, AWH, AXTA, AYI, BABY, BBP, BF.A, BF.B, BFAM, BIB, BID, BKFS, BKS, BLKB, BMRN, BOOT, BOTJ, BPMC, BSTC, BYD, CAG, CAKE, CAVM, CE, CEB, CF, CHFC, CIEN, CMRX, CNMD, COKE, COLL, COT, COTY, CPB, CRH, CSFL, CTRX, CVS, CYBR, CYNI, CYT, DAC, DG, DIS, DLPH, DPLO, DSKX, DST, DTV, DXCM, EA, EGBN, ENS, ENSG, ENTG, EPAM, ESNT, EVC, FCSC, FCTY, FEYE, FISV, FLXS, FRED, FTNT, GCBC, GD, GDDY, GEVA, GIII, GILD, GIMO, GPN, GS, GSIG, GTT, HAIN, HALO, HAS, HAWK, HDS, HIFR, HIHO, HOLX, HRTX, HSIC, HSTM, HZNP, IBB, IL, ILMN, INFN, INGN, INSM, INSY, IPAR, IPHI, ISSI, IXYS, JHX, KFY, KMPH, LAZ, LGF, LHCG, LKQ, LMNS, LOXO, LPSB, M, MA, MAN, MANH, MASI, MATW, MCRI, MENT, MHK, MKL, MLNX, MMC, MMSI, MNTA, MORN, MTD, MYCC, NAT, NCOM, NHTC, NKE, NWL, OMCL, ONEQ, OSIR, PANW, PBH, PBIP, PENN, PETS, PF, PFPT, PGR, PGTI, PKI, PLAY, PLMT, POZN, PSCC, PSCD, PSCF, PSCH, PSCT, PZZA, Q, QADA, QADB, QQEW, QTWO, RARE, RDN, RDUS, RNG, RNST, ROL, RPTP, SBUX, SC, SCHL, SCI, SCL, SEE, SEIC, SGEN, SGYP, SIGM, SIMO, SIRO, SKX, SLAB, SNA, SNX, SOHO, SPB, SQBG, SSFN, SYBT, SYNA, TCX, TFX, THG, THRM, TILE, TMK, TPX, TREE, TSCO, TSS, TV, TWOU, TWX, ULBI, VOYA, VR, VTWG, VTWO, WAT, WCIC, WEBK, WMS, WWD, XL, XNCR, XON, XXIA, ZIXI, ZNH, ZTS
Stocks that traded to 52 week lows: AAVL, APIC, APP, AXON, AZUR, BGH, BIS, BLT, BOXC, CEQP, CH, CHK, CLBS, CNX, CTP, DAVE, DOM, DPW, DSCO, DTEA, EGLE, EOX, EQGP, ERA, FHCO, FSC, FSNN, GEF.B, GGB, GHY, GLF, HERO, HGT, HH, HOV, IAF, IO, ISD, KST, MFV, MGF, NAV, NETE, NR, NSLP, NSM, NTG, NURO, OB, OII, ORIG, PCN, PHK, PHT, PLPC, PSF, PVA, RELL, RLJE, RUSHB, SGF, SPW, SRSC, SRV, USEG, WEA, WING, XPL, ZAZA
ETFs that traded to 52 week highs: IBB, IGN, IHF, IWC, IWM, IYF, IYH, KIE, MDY, UWM, UYG, XBI, XLF, XLV, XLY
ETFs that traded to 52 week lows: PALL, VXZ
8:02 am SunPower breaks ground on Henrietta Solar Project; co expects the plant to be operational by the end of 2016 (SPWR) : Co announces it has started construction on the 102-megawatt (:AC) Henrietta Solar Project in Kings County, California. The system will generate power for Pacific Gas and Electric's customers under a long-term power purchase agreement. SunPower expects the plant to be operational by the end of 2016.
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